GST overhaul to directly benefit Indian automotive sector: Industry players

New Delhi, Sep 4 The landmark Goods and Services Tax (GST) reforms announced by the government will give a strong push to India’s economy, enhance consumer confidence, and directly benefit the automotive sector, industry leaders said on Thursday.

Unsoo Kim, Managing Director of Hyundai Motor India, said the reforms will act as a powerful driver of growth.

“This revolutionary step will provide a strong impetus to the Indian economy, enhance buoyancy and further strengthen consumer confidence.

Kim added that the GST rejig would significantly support the auto industry. “Notably, 60 per cent of our ICE portfolio will now fall under the 18 per cent slab rate, with the remainder at 40 per cent.”

“These reforms align seamlessly with the Government’s vision of Viksit Bharat and the Make in India initiative, encouraging domestic manufacturing and boosting demand across both urban and rural markets,” he added.

Balbir Singh Dhillon, Head of Audi India, also welcomed the reform. “We view the GST simplification as a step in the right direction – one that supports industry growth and helps us expand the market.”

“The GST Council’s move to retain a low rate for EVs is a welcome step; this brings much-needed clarity and makes our portfolio more accessible to discerning buyers,” he said, adding that the new structure enhances transparency and strengthens long-term strategies.

Earlier, the GST Council announced sweeping changes to India’s indirect tax structure, reducing the slabs from four to two -- 5 per cent and 18 per cent -- with luxury items such as large SUVs placed in the 40 per cent bracket.

From September 22, small cars and two-wheelers will attract just 18 per cent GST, down from the existing 29–31 per cent, while larger vehicles will face 40 per cent GST, lower than the current 43–50 per cent range.

Motorcycles under 350 cc will also become cheaper, with GST dropping from 28 per cent to 18 per cent.

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